State Department responds to Army Radio report that imprisoned Israeli spy will be release in exchange for extended peace talks.

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Days ahead of Israel's expected release of a fourth batch of Palestinian prisoners, the United States said on Wednesday it was not at the moment planning to release Israeli spy Jonathan Pollard in exchange for Israeli and Palestinian moves to extend peace talks.

"There are currently no plans to release Jonathan Pollard," US State Department spokeswoman Jen Psaki said in response to an Army Radio report that claimed Washington had made the offer to free Pollard in order to salvage negotiations.

Pollard was convicted "of a very serious crime, was sentenced to life in prison and is serving his sentence," Psaki added.

Earlier Wednesday, Army Radio cited diplomatic sources in Jerusalem as saying the United States had agreed to release Pollard as part of a negotiated compromise to secure the extension of talks between Israel and the Palestinians past their initial deadline for the end of April.

According to the report, Israel would release another 26 Palestinian prisoners, including some 14 Arab-Israelis, in exchange for the US gesture.

The deal would also obligate Palestinian Authority President Mahmoud Abbas to keep his negotiators engaged in the current round of talks and in an extended period through the end of 2014.

Economy Minister Naftali Bennett expressed skepticism over the reported offer, saying he had not received confirmation from Prime Minister Binyamin Netanyahu.

"It's not certain to happen, and in any case, we need to stop begging [Abbas] to agree to conduct negotiations with us," Bennett said.

"I'm very skeptical. I didn't see the United States reach its hand into its pocket on the Pollard issue and I haven't heard [about this] from the prime minister. I don't assume that it will really happen," he added.

On Sunday, senior Israeli officials told Israel Radio that the peace process is in danger of collapsing. If no agreement is reached between the sides regarding the fourth installment of the prisoner release, which was originally scheduled to take place Saturday night, the negotiations could break down completely.

US Secretary of State John Kerry and his team put forth the proposal in an effort to salvage the talks after Prime Minister Binyamin Netanyahu made it clear to the top US diplomat that he would not release the Palestinian inmates at all if the talks culminate at the end of April, as set as an initial nine-month deadline.

The government has remained adamant in refusing to free Palestinian citizens of Israel in the prisoner releases.

The Palestinians have said they would leave the negotiating table if the Israeli Arab prisoners are not released. However, there is currently no majority in the Israeli cabinet to release them.

By releasing Pollard from his nearly 30-year incarceration, the US hopes to gain approval from Netanyahu's splintered coalition for measures to proceed with the negotiating process.

Deputy Defense Minister Danny Danon has threatened to resign and to oust Netanyahu as Likud leader if the release, set for Saturday night, takes place.

Gil Hoffman contributed to this report.

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